In the modern world of financial services, people don’t expect a lot of cooperation – even collaboration among credit unions. And especially in the state where Bank of America is headquartered.
Still, there is a beacon of hope and the precise reason no credit union of any size should be taxed. State Employees’ Credit Union (SECU), the world’s second largest credit union and North Carolina’s 4th largest financial institution, has birthed or supported not 1, not 2 but 4 credit unions.
Twenty-five years ago, it partnered with Self-Help Credit Union to launch Latino Community Credit Union. That credit union is now more than $1.05 billion with a B in assets and serves more than 144K members. It became an independent credit union last fall.
Now, after 42 years, the $4.03 billion Local Government Federal Credit Union (LGFCU) will be spun off from SECU on June 1, 2025, and become Civic FCU, a credit union LGFCU started in 2013.
Confusing enough? There are two more credit unions SECU will continue to support. In a time when credit unions are merging away, SECU has created or sustained 4 credit unions.
SECU CEO Leigh Brady challenged other credit unions to do the same, and LGFCU CEO Dwayne Naylor is taking that challenge seriously. LGFCU will house the National Association for Latino Credit Unions & Professionals (NLCUP) in its headquarters for free.
Both multi-billion credit union CEOs sat down with The Credit Union Connection Host/Founder/CEO Sarah Snell Cooke to talk about the process, collaboration among credit unions and to throw down the gauntlet for other credit unions. This is one more reason why no credit union of any size should be subject to federal income tax.
Below the video is an article from Leigh and Dwayne.
And, below that is the full transcript. (Caution: Automated.)
Cooperation and Collaboration: A great credit union story
State Employees’ Credit Union’s (SECU’s) vision and innovative approach to bringing credit union services to 500,000 additional consumers in North Carolina is one of the greatest examples of cooperation and impact. What started as an opportunity to provide services to two distinct membership groups has resulted in three separate credit unions. This is a story of cooperation, collaboration and independence!
The initial thought over 40 years ago was that SECU could serve state and local government employees through one credit union, but some banks insisted the membership base was too broad and raised a legal challenge. So, in March of 1983, Local Government Federal Credit Union (LGFCU) was born! SECU had the resources and infrastructure already in place, and for the past 42 years, SECU has been the bricks/mortar and the front-line member service delivery point for LGFCU, which has grown to 400,000 members and $4 billion in assets.
But wait – there’s more! Latino Credit Union (LCCU) was founded in 2000 as a grassroots response to a wave of robberies and muggings of Latino immigrants in Durham, North Carolina. SECU and Self-Help Credit Union, along with local community groups, banded together to form the credit union, which operated their own bricks/mortar location and just needed back-office support, training, processing, etc. SECU stepped up to provide that, and 24 years later, Latino Credit Union now serves over 150,000 members with over $1 billion in assets and has 15 branches across the state! SECU has always believed in the power of partnerships and collaboration and saw an opportunity to help both LGFCU and LCCU. This allowed both credit unions to efficiently serve their members while remaining independent institutions.
Over time, as both LGFCU and LCCU strengthened their operations, they began to develop unique approaches to serving their memberships that had distinct needs. Recognizing this, both LCCU and LGFCU have worked with SECU on strategic transitions that would migrate their credit unions to independent core systems, fully separating them from SECU.
LCCU retained its combination of a branch/digital model with a focus on tailoring products to specifically address their members’ needs. LGFCU has chosen to embrace a digital-forward model. After seeing shifts in member behavior and the increasing demand for robust online options, LGFCU has responded by investing in cutting-edge technology, a mobile-centric banking experience, and AI-driven member support. This shift will afford LGFCU the opportunity to reach a broader audience, streamline operations, and offer innovative services their members have requested. As part of their strategy, LGFCU has chartered Civic Credit Union, and at independence from SECU, will merge the members of LGFCU into this new, digital-first organization.
The migration of LGFCU and LCCU to independence is a great example of the power of cooperatives. SECU’s initial support allowed LGFCU and LCCU to flourish and now, through the cooperative work and ongoing support of SECU, LGFCU and LCCU will fully stand on their own and be poised to tailor their operations as their Boards strategically envision for their futures. Will the journey be easy for the three credit unions? No – there will certainly be bumps along the way, but such is the case when cooperatives are working hard to help others succeed.
SECU remains a leader in supporting the cooperative movement by providing back-office operations for Greater Kinston Credit Union and all services for NC Press Association Federal Credit Union. LGFCU/Civic and LCCU are now empowered with the flexibility to create member experiences that align perfectly with their individual missions. Maybe it’s time that SECU helps to build another LGFCU/Civic or LCCU. Or maybe it’s time for all credit unions to do the same and “pay it forward” to ensure the sustainability of our industry.
“People Helping People” is not just a catchy phrase – it’s a calling!
Disclosure: The transcript of this video is automatically generated.
Sarah Cooke 00:08
Hello. Welcome to The Credit Union Connection. I’m here live with Leigh Brady from CQ in North Carolina. Welcome. Thank you, Sarah, yeah, we’re coming to you. Live from the GAC 2025 how’s the show been for you? So far, Leigh, it’s been great. I
Leigh Brady 00:25
always view this as a time to connect with folks from all over the industry, and you get to very efficiently see them all in one location. And then we look forward to part of our group hike the Hill today. I look forward to heading there tomorrow. So obviously, with a mission in mind, what is your mission in mind that you bring taxation? Well, yeah, that’s the big one. Yeah. And really spread the good works about our credit union and how we positively impact North Carolina in so many ways, yeah? And
Sarah Cooke 00:57
like we were, I know a lot of the discussion at the underground was about storytelling. And I remember Jim Blaine, previous CEO couple back, he said, We don’t market. We don’t market. And like, put your storytelling by doing, you know, building this housing for teachers, affordable housing for teachers, and although that is your marketing, even if you’re doing it, not necessarily for that reason, but that’s the brand. That’s that is how you build your brand. They do the things rather than talk about the things. But you do need to tell the guys up on the hill,
Leigh Brady 01:35
we’ve got impact reports and we are ready. Nice. So you had data behind it, we’ve got data three and that same foundation that you talked about on the teacher housing just hit our 20th anniversary last year, 300 million in giving.
Sarah Cooke 01:48
Wow, wow, wow, wow, that’s great. I can’t believe I’m that old doing this that long. Don’t worry. So you’ve been the CEO now I’m coming up on two years, coming up on two years, right? How has it been? Is it everything you dream of? Because I know you were at the credit
Leigh Brady 02:08
union. I’ve been at the credit union over 37 years. Yeah, you kind of knew the gig. Yeah. You know, in some ways, it’s been even better for me, because I’ve been able to develop new relationships, and I actually get out more to see the our folks in the branches and the communities and and see the really good works that we’re doing. I love interacting with our members, with our volunteers and and seeing the impact that we have in North Carolina in such a positive way. So that part has been fun. Obviously, with the change going on in the financial services industry, that’s not always fun. I know, I know what happened this morning that I don’t know about. Yeah, exactly. And we’re doing a lot of technology upgrades. So it’s it’s really been fun. I’ve always said, my my mom, who’s she passed away about 10 years ago, but she always said, leave something better than you found it. And I found a great organization, one that I love so incredibly, but, but we needed some technology upgrades along the way, and I’m happy to have that focus for us to do that and provide some some things for our members that they’ve been asking for. Actually,
Sarah Cooke 03:20
probably about 10 years ago, you gave my friend a job. We were, should I play volleyball with her up in Maryland? And she, she’s like, I have this job application, this job I found. Should I go apply at CQ? I was like, yes, go do it. No. So she’s still there in your IT
03:38
department. That’s wonderful. That’s wonderful.
Sarah Cooke 03:39
So I know I mentioned underground, underground earlier, and you talked a little bit about your story, because it’s not only your community that you’re supporting, but you are. You’re supporting other communities and other credit unions we are, which is a good thing, a great thing. For 42 years, I think,
03:59
yeah, it’s been a long time. Yeah,
Sarah Cooke 04:01
so talk about that mindset, because I feel like and I don’t think I’m alone in thinking that credit unions aren’t as cooperative as they used to be.
Leigh Brady 04:10
No, they are not, and that’s one of the things that underground, that I kind of mentioned, that put out a challenge for credit unions, because we need to sustain smaller credit unions, we need to help them grow, and sometimes they’re not able to do so from the regulation side. I mean, things are just and the IT side, technology is way too cumbersome for them to endure all of those things that they have to worry about. So I’d love for credit unions to step up. We did so, as you mentioned, 42 years ago, really, with in March of 1983 with local government, federal credit union, where, back in the day, they thought, oh, it’s not a big deal to have local folks come in and be members of state employees. We can put them all together. And the banks weren’t having that. Mm. Hmm. And so, you know, we helped to form local government, federal credit union, but they used our branches. So we have all provided that bricks and mortar. We’ve provided the frontline staff pretty much everything, wow, other than they did, end up doing like the financials and stuff like that in the end. But at the beginning, we did that too, so and now they are going out on their own. We had a different model that started about 23 to 24 years ago with Latino Community Credit Union, where we worked with self help and some other kind of groups in the area that served the Latino community and started that up. They had their own branch. And quite frankly, I mean, we, all we had to do was the back office processing for them. You know, we did training, we gave them extra furniture
Sarah Cooke 05:51
printers.
Leigh Brady 05:55
It helped to form that credit union. And they actually went out on their own last September and 150,000 members now, over a billion in assets. Local is going out on their own June one of this year, and they have 400,000 members, 4 billion in assets. And these are not tiny credit unions, not anymore. No, they were. So it’s, it’s, you know, it’s wonderful our, let me tell you, our folks are going to miss the members of local. They are, yeah, I mean, they have loved them and cared for them and served them. It didn’t matter whether you’re a state, state employees, credit union member or local member, they you were a member. And that’s the environment that we created, and I’m so proud of that, especially in North Carolina, the big things absolutely. So we still serve North Carolina Press Association, Federal Credit Union members and all of our branches, but they’re a $9 million credit union, very small, but we help sustain them. Our Chief Lending Officer is also their CEO. We serve in a lot of ways, yeah, and then greater Kinston credit union is the last historically African American credit union in North Carolina. Well, they have their own branch, but we do all of their processing for them. We do a lot of training for two helping them with Board Governance. What size is that one? They are $14 million credit union so you know, and we are looking to replace our core and getting that started
Sarah Cooke 07:22
on credit union switching in March, it’s
Leigh Brady 07:25
going to be a big deal, obviously, the biggest project that our credit union really has ever had, since the last core conversion 42 right? And you know, from that standpoint, as we were working to negotiate, something that’s been really important to me is us having the capacity to serve small credit unions, to grow credit unions, whether that’s through maybe a processing type thing back office only, or maybe that’s them coming into our branches once again. I want to pay that forward again, and I’d love for Latino and maybe local to do that same thing, yeah,
Sarah Cooke 08:03
and you were talking about the few 100 million that, the that the that housing project, or the teachers raised, but then all your other projects, oh, yeah, and your credit unions and your credit unions projects, you know. So it definitely, you know, it when you put good out, that’s, that’s what comes out other, you know, you
Leigh Brady 08:26
know, the recent, the recent example, a hurricane Killeen. Such a, such an impactful event for western North Carolina. And, I mean, we were on it immediately, so that, that weekend, right after that storm came in. I mean, we we were meeting as an exec team, and we had all the feelers out. And our foundation is in three phases, given almost $9 million to different non profits to help, whether it’s housing, food, you know, just some basic shelf in the beginning, right? And so now it’s rebuilding some of that. But it’s, it’s been very impactful. All of our branches collected items from the community, and we got those where they needed to be. So it’s, it’s called the cooperative. Standpoint, Suncoast lent us their mobile ATM nice and and we were able to also get cash to credit unions that couldn’t get cash, and you’re
Sarah Cooke 09:24
all multi billion dollar credit is still cooperating, still collaborating. Now I always give my guests the final thought, What would you like to leave our credit union audience with today?
Leigh Brady 09:35
Figure out how you can be impactful to this industry. It may be in a small way, it may be in a big way, but worry about something other than your credit union, right? You have to worry about the industry. We all get kind of in our boxes, so to speak. We’ve got to get out of the box, and we’ve got to start thinking cooperatively. As you just said. And for the industry. Yeah,
Sarah Cooke 10:01
yeah. Thank you so much. Vander Lee, I
10:04
appreciate it. Thank you.
Sarah Cooke 10:07
Hello. Welcome everybody. My name is Sarah snow Cooke. I’m your host for the credit union connection. I’m here today with Dwayne Naylor, welcome. He’s the CEO at local government federal credit union in North Carolina. Tell us a little bit about your credit unions and your background,
Dwayne Naylor 10:24
okay, my background, I’ve been with credit unions for 40 ish years, and started with state employees, worked at local government, went to Virginia and was executive vice president at Langley, then came back to local government, and I’ve been there 12 years. In that time, we started a new credit union from from scratch. We chartered it local government, basically started civic Federal Credit Union, and we built a very advanced infrastructure, honestly, in preparation to take local government independent at some point, and we didn’t know what what time that was going to be, but we decided about the more decided about two and a half years ago that we were going to be independent of state employees. And relationship with state employees goes back 42 years, where it is supported the banking the banking lobbyists challenged state employees and said, local governments not in your field of membership. And so they were going to kick out about 3000 members at the time. And so there was an innovation where state employees worked with North Carolina local government and chartered a separate credit union, local government credit union, and then they were able to serve the front and back office, but it was a separate credit union, separate board, and also separate strategy. So fast forward to around 2013 state employees at the time said they were not going to serve organization or business points, and that was very important to us, because we had fire lending and served local government units. And so at that point, the board said, let’s, let’s find a solution where we can serve our members directly and give them, give them services they’ve been asking for advanced technology systems. And so there was an innovation again. So instead of kicking out about 1000 members from local government federal credit union, local government started civic and charged the same fee that state employees have charged. So it was showing that cooperatives continue to innovate. And so we were able to launch the most robust future focused, robust future focused financial institution and gain internal competencies. And state employees gave us about three years to get the Charter, which is another time that they helped, because they already stopped serving the business and organization accounts. And so that three years was critical, because chartering process within see what so we charter separate credit union to make sure we didn’t channel have channel conflict at state employees. So it’s very complex, but basically what happened 1983 local government was getting kicked out of state employees. There was an innovation to start local government credit union that has now grown to over 400,000 members and poor billing and assets. And now in 83 excuse me, 2013 local government innovated and chartered another credit union to serve the same field of membership, local government not knowing when we would go to independence. And so that grew to about 8000 members and about 125 million in assets. So now here we are heading into June 1 and state employees, we’ve been working with them, and they’re born for about two and a half years. We’re on our fourth data cut, which means we’re almost ready for the deconversion, they call it. And so all 400,000 members are going to go into the 11 branches we built last year, and then they’re going to see the automated services, where they can do things online and connect in a very advanced way. So it’s a major transformation for our members. But the coolest thing is that state employees, executive management and our boards came together because we are volunteer led. This is not a CEO making decisions, right it is. Our boards came together, and our board said we are going to be independent and we’re going to leave at this period. And the state employees board said, Absolutely, we support you 150% so all that help, and hundreds of people working on each side, and their 278 branches have members going in there, so we’ve been working with them very closely for the independence. The great thing is, we’re not the first one, because Latino Credit Union started 20 years ago, and Latino went independent last September, and so their whole credit union moved over onto their infrastructure, and then we are the second. That one. And so the coolest thing about cooperatives, helping cooperatives is state employees. Rather than kick out people and not give the field member, give membership between lean Latino Credit Union and local government. Credit Union, that innovation with state employees is serving over 550,000 members in mostly North Carolina, hugely innovative, and now they’re helping us to independence, which means they’re losing income and things. And so I had a business person say, Why in the world would state employees do that? And I say it’s because cooperatives, helping cooperatives, it’s not for profit. And Leigh Brady, the CEO we’re very close friends has put a challenge forward for us to pay it forward, and so we are helping other credit unions and things. As we’re heading to independence, we always have some type of partnership in working our boards again, have dinner. We’re having dinner in two weeks. It is an amazing story that really hasn’t been told in the credit union space, and the wonderful thing about it is now we’re paying for because, like the National Association of Latino Credit Unions and Professionals, we are giving them free space in our headquarters, and then they’re going to have their national headquarters in our space, and we’re dedicating it. We’re very excited about that, and we’ve done some it and lending and things like that before. So a lot of people don’t understand. And there’s about two other credit unions that state employee serves. So it’s a remarkable story about state employees over the last 42 years, has served these. These are members in a in a loving and innovative way. And then we can now serve our members, we’ve we’ve grown scale competencies. It’s a different model, but that, you know, I don’t think there’s another credit union in the industry that has ever had this type of impact of growing out credit unions rather than merging. So it’s amazing story, and we’re trying to tell that now, not only because we’re going independence. It’s just that sometimes the press will pick up other things, but this is a remarkable story of volunteer board leadership, and it wasn’t about CEOs. It was about the boards coming together to say, this is what we’re going to do and how we’re going to
Sarah Cooke 17:15
do it. It seems like and people often talk about that, cooperation isn’t still going on with cardigans the same way it used to be. So I think this is an excellent model. Like you said, instead of merging in these smaller credit unions, you know, growing more, how do you, I mean, are you sharing this information, if with anybody, or you would that be willing to share this information with anybody about, like, how it happened? And, you know,
Dwayne Naylor 17:41
absolutely, and it’s interesting, in North Carolina, we have tried to get, like the general press, to be able to tell the story. And no one will pick it up. They only pick up. They probably don’t get it. The things that aren’t, that aren’t very positive, no, I think for us, it’s very important to tell the story now, because we are getting ready to birth in Independence, and we have been working towards this diligently for about 25 years. But no, we want to get on the rooftops and yell out because it is there’s not a business advantage to state employees, but the board, the volunteer board, said this is how we’re going to serve our members, and we’re going to serve them better than anybody else. State employees have set a very high borrowing choice, and so that’s good, because it’ll force us, it’ll force us to to create an experience that the members do not have now. But no, I think this is the most powerful this is one of the most powerful stories because there’s a greater Kingston credit union and a North Carolina Press credit union. Press credit union they’re still serving. So that is four credit unions, two will be independent, and two others, and I think they may have the strategy of serving other credit unions. I’m not certain Lee Lee can help you with that, but now it’s an incredible story that I think that we’re in a position that that we can really bring bring light to it as an opportunity for the industry, for other people to step up, hopefully, yeah, yeah, put some
Sarah Cooke 19:06
peer pressure. That’s right, that’s right, that’s right. Because, you know, one of the issues that we have today is all the mergers of small crane prices we’ve mentioned before, and really it’s those small crayons. It’s not that large grains don’t serve their members Well, yeah, although I’m sure some don’t same with small guardians. But it’s those small guardians that’ll go into this empty area where, yes, there’s 500 people in this county and but they’ll go serve them the best that they can, yes, and then the way they know the member wants it so
Dwayne Naylor 19:37
like and give that member respect that they don’t have. Now, we’re in our new model. We are we’re challenging the typical branch location, because, you know, we study global, but we have impact local. And, you know, I’ve been in Bangladesh and seen homeless people with a with a phone, because in Bangladesh, to go a mile, it takes about an hour and a half. So. So they’re able to reach in, since the world is changing, and now that’s going to be a big shift for our members, but they understand that. They they literally have us in their pocket, right? I mean, they can look at us. We can fill out everything for them. So it’s a little bit different where we don’t have to have a branch everywhere for our model for the independent local government credit union, which is going to be named civic it’s a whole nother story, two syllables, not 26 the whole thing is, we’re going to be teaching our members that we’re right with you all the time. And instead of building maybe a ten million branch, we’re hiring people and relationships to connect, to connect with our members. So it’s a big it’s a big change for them, but we know, we know that we’re going to take care of them with our hearts. We our local government Field of Membership is just servant leaders that serve the community in a million different ways. You know, we’re values based. That means people for profit matches credit unions, right? Planet and sustainability is critically important to our membership as well, and then prosperity that is everyone who touches our organization, including our partners and vendors, have to benefit from from being a part of us doing good, right? And so it’s a much different environment than many, but it matches our membership very well. So we’ll challenge that you have to have a branch is really relationship center, and that’ll be a big change for our members, right because they got 278 branches right now, if state employees got a 90 year start on us, 290 branches for community centers would be great, but they have a they Latino and local government being independent of state employees will allow state employees to move very fast, and so watch for great things from them. Yeah,
Sarah Cooke 21:43
I get to talk to Lee tomorrow. Yeah, yeah, awesome. She’s She’s
Dwayne Naylor 21:46
incredible, and I give her a hard time. But we meet a lot. Our executive teams are close, our boards are close, and that’s the beauty of it. That’s true. Cooperatives, helping cooperatives, yeah? Because that could have gone been much different with any other organization. Yeah. So,
Sarah Cooke 22:02
so, as I always do, I’m going to give my guests the final thoughts. How do you want to close out this? This, this interview today.
Dwayne Naylor 22:09
So we’re in Washington, DC, and we’re talking about threats. We’re talking about things we’ve talked about in the past, taxation, consolidation of regulators, I mean, all these things. I just think in the in what perceived as the darkest time is the opportunity where credit unions make the biggest difference. Usually, yeah, so when we were talking about, hey, they could lose Medicare, they can lose Social Security, then we’re going straight back to the 1930s where credit unions were most relevant. So we have got to be the light and the storm, right with all the negativity, we’ve got to come together like we never have cooperatives, helping cooperatives, because that collective action of our will bring us back to the core of who we are, and we will change lives like we never had
Sarah Cooke 22:56
before. Awesome. Thank you so
Dwayne Naylor 22:57
much. Thank you talking with me today. Thank you all right. You.